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CHIT FUND ACT
An Act to provide for the regulation of chit funds and for matters connected therewith BE it enacted by Parliament in the Thirty-third Year of the Republic of India.
Chit funds have been playing a stellar role even before the advent of modern banking era, in coming to rescue of the needy at affordable terms. This system has numerous built-in advantages due to which people prefer this option over other formal institutions
Save Money
Saving money is one of those tasks that's so much easier said than done — everyone knows it's smart to save money in the long run, but many of us still have difficulty doing it.
There's more to saving than simply spending less money, although this alone can be challenging. Smart money-savers also need to consider how to spend the money they do have as well as how to maximize their income.
How Chit Fund Works
A chit scheme generally has a predetermined value and duration. Each scheme admits a particular number of members (generally equal to the duration of the scheme), who contribute a certain sum of money every month (or everyday) to the ‘pot’. The ‘pot’ is then auctioned out every month.
The highest bidder (also known as the prized subscriber) wins the ‘pot’ for that month. The bid amount is also called the ‘discount’ and the prized subscriber wins the sum of money equal to the chit value less the discount and the fixed fee to the foreman.
The discount money is then distributed among the rest of the members (or the non-prized subscribers) as ‘dividend’ and in the subsequent month, the required contribution is brought down by the amount of dividend..